UK Private Medical Insurance 2009

Published by: Datamonitor

Published: May. 11, 2009 - 107 Pages

Table of Contents

Overview

Catalyst

Summary

Executive Summary

The PMI market saw stellar growth in 2008

The UK PMI market grew again in 2008

Standard Life marketed heavily in 2008

Pru Health, AXA and Simplyhealth grew their market share in 2008

Pru Health's business grew by over 50%

AXA's PMI business added nearly £90m in premiums

Simplyhealth's market share grew to 2.1%

Total health insurance premium income will grow slowly in 2009 and 2010 before seeing steadier growth between 2011 and 2013

Slow growth is expected in 2009 and 2010

The group sector is expected to see slightly lower growth than the individual market in the short-term

Table of Contents

Table of tables

Market issues

Introduction

Health insurers can now help consumers with the cost of cancer drugs

NHS patients are now allowed to pay privately for additional drugs without forgoing their NHS care

A cancer top-up policy could be attractive to consumers who have been diagnosed with cancer or are conscious of contracting cancer

There is debate on the potential market size for cancer top-up policies

Retention activity is more important than ever

The previous recession appears to have taken a toll on the PMI market suggesting difficult times ahead

Interviewees are already feeling the effects of the recession

Maximizing retention rates is key to protecting revenue in the recession

Market context

Introduction

The PMI market saw stellar growth in 2008

The UK PMI market grew again in 2008

The group market drove subscriber growth for the second year running

The number of group subscribers grew by 6.1% in 2008

The total number of people covered by a PMI policy increased by 3.7%

Premium rates increased again

Average premium rates grew for both group and individual policies

Claims costs increased

Healthcare trust schemes pose a threat to the PMI market

There is significant potential to grow the penetration of PMI

Low overall coverage means PMI insurers could grow the market

The penetration rate of PMI varies little with age

Penetration peaks among wealthier consumers

Penetration of PMI is highest among the AB socio-economic group

Consumers over the age of 45 form the core market for individual health insurance

Marketing and distribution

Introduction

Standard Life marketed heavily in 2008

Standard Life marketed its EspritHealth product heavily in 2008

The top 10 PMI advertisers are focusing on direct mail advertising

A direct distribution strategy is the key way to target the individual market

Individual PMI policies are most likely to be arranged via an employer or direct with the insurer

A direct strategy is key to winning customers aged over 60

A phone-based sales strategy is an important means of acquiring the over 60s consumer

Individuals who do not receive PMI via their employers are most likely to buy a policy over the phone

Phone sales are particularly important in acquiring consumers aged over 60

It is essential to offer lower cost products in order to bring new customers into the market

Over 15% of non-PMI customers are interested in taking out a policy

PMI providers should be focusing on consumers aged between 18 and 29

Consumers in the mid to upper income bands are the core market for PMI

It is essential that PMI providers continue to bring low cost products to the market

Insurers should pay special attention to the idea that the NHS does not give adequate medical care when targeting the over 60s

Competitive dynamics

Introduction

Pru Health, AXA and Simplyhealth grew their market share in 2008

Pru Health's business grew by over 50%

AXA's PMI business added nearly £90m in premiums

Simplyhealth's market share grew to 2.1%

BUPA, AXA, Aviva, Standard Life and WPA continue to rank as the top five competitors

BUPA, AXA and Aviva controlled 81.4% of the market in 2008

Standard Life saw its market share contract by 0.3 percentage points

WPA grew its GEP by 2.7% while its market share decreased marginally in 2008

Legal & General's premiums fell as it has withdrawn from underwriting policies

Most of the top 10 health insurers play in the group and individual sectors

Future decoded

Introduction

Datamonitor expects the number of group and individual subscribers to fall in the short-term

The number of individual subscribers is expected to fall throughout the forecast period

The number of group subscribers is expected to fall in 2009 and 2010 due to the recession but resume growth between 2011 and 2013

Premium rates are expected to increase throughout the forecast period

Total health insurance premium income will grow slowly in 2009 and 2010 before seeing steadier growth between 2011 and 2013

Slow growth is expected in 2009 and 2010

The group sector is expected to see slightly lower growth than the individual market in the short-term

APPENDIX

Definitions

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Subscriber numbers and unemployment rate, 1985-2008

Table 2: UK PMI GEP by sector, 2004-08 (£m)

Table 3: Number of UK PMI subscribers and number of people covered by policy type, 2004-08 (000s)

Table 4: Estimated UK PMI average policy premium by policy type and total claims incurred, 2004-08

Table 5: Comparison of the number of group PMI subscribers and healthcare trust subscribers, 2004-08 (000s)

Table 6: Are you covered by a private medical insurance policy, either personally or jointly with a partner? Responses split by age (September 2008)

Table 7: Are you covered by a private medical insurance policy, either personally or jointly with a partner? Responses split by household income (September 2008)

Table 8: Are you covered by a private medical insurance policy, either personally or jointly with a partner? Responses split by socio-economic group (September 2008)

Table 9: Who pays the premiums on your private medical insurance policy? Responses split by age (September 2008)

Table 10: Marketing spend on PMI products, top 10 advertisers, 2008

Table 11: Marketing spend by media, top 10 PMI advertisers, 2008 (%)

Table 12: Which of these best describes how you arranged your PMI policy? (September 2008)

Table 13: Which of these best describes how you arranged your PMI policy? Responses split by age (September 2008)

Table 14: Which of these best describes how you arranged your PMI policy? (September 2008)

Table 15: Which of these best describes how you arranged your PMI policy? Responses split by age (September 2008)

Table 16: How interested would you be in buying a private medical insurance policy for yourself or your family? (September 2008)

Table 17: How interested would you be in buying a private medical insurance policy for yourself or your family? Split by age (September 2008)

Table 18: How interested would you be in buying a private medical insurance policy for yourself or your family? Responses split by household income (September 2008)

Table 19: Why do you not have private medical insurance? (Multiple responses allowed) (September 2008)

Table 20: Why do you not have private medical insurance? Responses split by age (September 2008)

Table 21: Gross earned premium and market share of the top 10 UK PMI insurers, 2007-08

Table 22: Forecast of the number of UK PMI subscribers, 2009-13f (000s)

Table 23: Forecast of the average PMI premium, 2009-13f (£)

Table 24: Forecast of UK PMI GEP, 2009-13f (£m)

List of Figures

Figure 1: The group and individual PMI markets grew again in 2008

Figure 2: WPA offers mycancerdrugs as part of its health-top up policy for an additional £4.20 per month

Figure 3: The previous recession appears to have taken its toll on the PMI market

Figure 4: The group and individual PMI markets grew again in 2008

Figure 5: The number of group PMI subscribers grew significantly in 2008

Figure 6: Average premium rates continue to rise in order to combat claims inflation

Figure 7: Healthcare trust schemes pose a threat to the PMI market

Figure 8: There is a significant potential to grow the PMI market

Figure 9: The penetration rate of PMI remains broadly the same across different age groups

Figure 10: Penetration rises significantly among higher income households

Figure 11: The penetration rate of PMI peaks among the AB socio-economic group

Figure 12: Consumers over the age of 45 form the core market for individual health insurance

Figure 13: Standard Life raised its stake in marketing spending in 2008 while Bupa still spent the most money

Figure 14: Bupa, HSA and WPA focused their marketing strategy on TV adverts in 2008

Figure 15: The direct channel is the best way to target the individual PMI market

Figure 16: A direct distribution strategy is key in acquiring consumers aged over 60

Figure 17: Nearly a fifth of policyholders arranged their policy over the phone

Figure 18: Phone sales are particularly important in acquiring consumers aged over 60

Figure 19: Over 15% of non-PMI customers are interested in buying a policy

Figure 20: Consumers aged between 18 and 29 are most interested in buying a private medical insurance policy

Figure 21: Mid to higher income consumers are most interested in buying PMI

Figure 22: PMI providers must continue to bring low cost products to the market in order to grow volume

Figure 23: A high proportion of consumers over 60 years old feel that the NHS gives adequate medical care

Figure 24: Pru Health, AXA and Simplyhealth gained market share in 2008

Figure 25: Most insurers have a presence in the individual and group markets

Figure 26: Group and individual subscriber numbers are expected to dip in 2009 and 2010

Figure 27: Average premiums are forecast to increase in both the group and individual markets

Figure 28: Datamonitor expects to see slow growth in the health insurance market in 2009 and 2010 before steadier growth resumes between 2011 and 2013

Abstract

• Consumer research on methods of arrangement and future buyer interest based on an exclusive survey of over 3,500 consumers.
• Insight into the effects of the recession and the potential for cancer top-up policies.
• Data on the market share of the top groups as well as an analysis of the marketing spend of the top brands.
• Forecasts of the future size of the market, subscriber numbers and the drivers that will affect the market going forward.

• Understand which of your competitors pose the greatest threat, which competitors are gaining market share and which are losing market share.
• Assess penetration rates, future buyer interest and the most effective distribution channels.
• Gain insight into the future direction of the sector, including market size and subscriber numbers and the major issues affecting the market.

About MarketResearch.com
MarketResearch.com is an online aggregator selling over 250,000 market research reports, company profiles and country profiles from over 650 research firms. Our reports will provide you with the critical business and competitive intelligence you need for strategic planning and marketing research. Coverage includes the US, UK, Europe, Asia and global markets.